Home Ownership

The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence.
Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for this relief.
This provision applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if (MFS).

No. The Assessment payments you paid your homeowner's association for maintaining common areas of the residential property, such as recreation or safety, are not deductible. Amounts paid are added to the tax basis of the home. The tax basis will be used in the year of the sale to determine the gain or loss on sale.

For mortgage interest payments of $600 or more, banks and other lending institutions will mail you Form 1098 listing your mortgage interest payments and also any deductible points. This amount is deductible on IRS Schedule A.

No. Legal fees incurred in reducing an assessment on property are not deductible.

A married couple owned and have lived in their principal residence for at least two years during the past 5 years period ending on the date of sale, filing a joint return can exclude up to $500,000 and a non-joint return can exclud $250,000.
Form 2119 (sale of residence) has been discontinued by the IRS. The taxable gain after the exclusion will be reported on Schedule D.
You cannot deduct a loss on the sale of your residence.

Generally points are deductible in full in the year paid if 6 requirements are met. Form 1098 Mortgage interest statement is used to report the amount of the paid points. Points paid to refinance an existing mortgage must be amortized over the life of the loan unless the loan proceeds are used to substantially improve the main residence. The portion used to improve the residence can be deducted in full in the year paid. Speak to your local CPA about the 6 requirements.

Generally, you can only deduct real estate taxes on real estate which you own and therefore have an obligation to pay. Therefore, if you pay your parent’s real estate taxes on their home, wit title in their name, you will not be allowed to deduct those real estate taxes on your income tax return. If you would like to deduct these taxes, you will have to be put on the title.